March 09, 2009

Resource Utilization —— some thought from Wining Margin game

Resource Utilization involves planning, coordination and control of industrial processes. To use the resource effectively we need to oversee the production process, predict the production schedule. Take an example in FACS module when we play the Winning Margin game, as a production manager I need Well coordination with purchasing and sales managers to make best use of resource in order to have better control of cash and generate more profit for the company.

In order to produce the right volume of product for the contracts signed from sales manager, I need to foreseen the production process to adjust the machine to produce appropriate products and thus make a suitable schedule. This would ensure there is no empty machine left, minimize wasting of resource. Purchasing manager needs to request right unit of raw material, he/she needs to coordinate with production manager to make sure minimal resource is unused and left in the inventory.

Bad coordination with sales manager may cause increase in unsold goods in inventory or insufficient product produced, which cannot generate maximal profit but also take occupation of cash. Bad coordination with purchasing manager may cause inefficient production or inefficient use of cash. If request more than production capability, unused material would be placed in the warehouse that means the resource is not used efficiently, in the contrast, less request may cause machines be left empty, ended up with paying the fixed cost without producing which is also a kind of waste.

In reality, Resource Utilization also needs to take care of time, quality, costs and customer satisfaction of products. As the rules in Winning Margin, we don't need to worry about these factors but if product is produced not in time or with bad quality, or the production cost is too high, it will directly impact on the sales. In large companies, if want to fully use the resource, they also need to deal with people, in order to maximize people's working potential.

March 05, 2009

Environmental Management

At first, I am a bit confused about the term of Environmental Management. As the lecture notes on website says "In this section (means Environmental management section) the focus will be on the Resource aspect, related to how buildings, equipment and material are managed."However, the whole topic later on is talking about an organisation to be environmental friendly. So in my opinion, the "Environmental" term here, is talking about natural environment, there is also another meaning we can understand from that is the environment around the organisation, to manage the environment in organisation is like what says above, to manage the assets and make best use of them. So this aspect of meaning can go to Facilities Management category.

Talking about natural environmental issues for an organisation, it has both sides effects. If organisation is using it well, it can generate a chain of benefits, bringing financial gains, product innovation and operational efficiency. But in most of time, implying Environmental Management is a long term investment, because at first it need large amount of capital including finance and human recourse to be invested in for new technology, new process, new production line and new management system etc. however those investment cannot be paid back in short term. Therefore, most of organisations lose interests in the first place as they can't see payback for the investment shortly. In addition, organisational and technology factors are still undercover, waiting to be studied and proven, maybe large investment end up with no coming results. So uncertainty of success is also a problem.

Nevertheless, to be environmental friendly is more and more important nowadays. The energy prices such as oil and gas are keeping increasing, environmental management can help organisation innovate new products and new processes to be cost efficient, e.g. using green energy instead of costly cure oil. On the other hand, the organisation who doing well for environmental management can win consumers' preference, it will have good public image among people, hence easier to get support and market share from public than those organisations who are causing negative effect to the environment. For example, GE once has been caught dumping production waste directly into the river on newspaper, which to some degree has destroyed its public image, hence people would less likely to buy its products. That's the reason Jeff Immelt, the current CEO, keep emphasize on investing in R&D for green tech to enhance its brand image.

To imply the environmental management, only the technology is not enough, it also need a process and good management system, like ISO14001 is a special tool for managing environmental issues for organisation. It needs a policy outlining the commitment to improving its environment performance, follow on the plans and programs. The plans need to be integrated in to day to day bases, not only on paper and also need to take measurement on the implication. It needs the whole organisation's effort through top to bottom, therefore training to make mutual understanding is essential. 

January 28, 2009

Learn to be a effetive employee rather than a leader

I would like to raise my voice here from the beginning of the LE module. When we step into the society, everyone will begin with a work from the bottom level of an organization, therefore to the pragmatism point of view, to understand how to be an ¡°effective employee¡± to help the company success, learn how to deal with different kinds of managers and leaders, and how can be promoted faster within the company are seems to more important and realistic for a student without any working experience. I think if we have a module based on those topics, it will look more attractive and helpful for our future. Nevertheless, leadership module and studying on the theories of leadership has told us many things. During the present stage, it at least helps us realize different features of leadership, thus able to choose the right person to follow with, in order to extend the maximum potential through the career. And in the later stage, when we get promoted in the company, it provides a good theory background for being a good leader if we combine our later experiences.

January 27, 2009

Ambiguity about Leadrship Theories

I am using transformaltion and charismatic leadrship as the approach in the LE PMA, to help WaveRiders to be successful. However, I find it is difficult to ditinguish the differences between the two theories. The theories of transformational leadership and charismatic leadership are with high similarity. Since it has various versions of the concepts about those two theories, lack of consistency in the use of terms makes it difficult to compare the differences between them. From the literatures of recent years, the concept of transformational leadership has been shifted towards charismatic leadership compare with the older ones which makes them nearly become one common concept of a theory. It results that if imply the approaches and processes of one theory will cause the achievement for the other. However, there is little point to distinct two similar theories in different concepts, unless it has enough evidence to prove that the features, processes, objectives and results are different from one another.

In addition, the elements which need to be emphasized on in order to become a transformational leader are much or less the same as the elements for how to be an effective leader, such as being good at communication, being influential, being visionary are all the factors of an effective leader. Therefore, further research can be carried on to underlying the special features and processes that a transformational leader should have. Meanwhile, the differences in objectives, results and most appropriate situation to imply between the both theories and effective leadership could also be investigated.

January 22, 2009

Changing of Management for Implying of Six Sigma

In order to imply Six Sigma, and to improve the competitiveness of the organization, we have to deal with the resistance brought from Six Sigma changing. For example, the resistances such as fear of unknown, habit of doing things, economic factors from individuals, and such as group inertia, structural inertia, changing of relationship (hierarchy) from organization.

Leadership plays a key role of helping management of change within an organization, which needs more than simple charisma, exhortation and the ability to motivate. Some useful leadership skill for the changing is like, leader must be congruence with the doings and sayings, to demonstrate commitment to change in everything that he/she say and do. He/she must be flexible that will readily adapt to use of new tools, will support those around them with a variety of approaches. And also, to be a leader does not always mean making the decisions but is about when and how to ask for help. In most cases, it is beneficial for the process of changing that, people are involved and being given the opportunities to develop their own solutions and understanding about change. Leader should be supportive by facilitating the group processes and coaching individuals.

Of course, the change cannot be implied without people's involvement. People in the organization are the principal enablers of change, it is important to recognize that successful change is achieved through the changing behavior of individuals and groups within the organization. It is essential to control people's emotions, motivations and behaviors for change, possibly from every individual and use the right emotions and behaviors of some people to influence others, or to influence people by organizational vision and leader setting as a role model. By and large, to deal with the resistances, the key is involvement, that people are given a real opportunity to develop their own understanding of what it means to them.

Normally in an organization, improve performance in one part ultimately has a negative effect on another part of business. For example sales team's performance improvement often conflicts against benefit of production department, purchasing department changes the nature of supply without considering the goods-inwards, and planning department improve its planning goals without considering needs of the users. So, Six Sigma is able to consider an entire process of business, lead the organization away from sub-optimization, towards looking at the whole picture and will bring a focus on the needs of the customers.

To have the process changing, choosing the right tool(s) to imply the change in the organization is crucial for a successful change. Firstly, before choosing tools, it is important to have a careful examination of the nature of situation. Using analysis tools such as Process Mapping, Culture Mapping, Allocating Cost or Benchmarking etc. to have answers to "what are the objectives" and "What are the obstacles". Once we have done this we can choose correct tools for implementation of changing.

Effective communication process is needed for overcome the resistance of change by spreading understanding and meaning. Organization must build relationships based on trust and fluent communication process to have mutual understanding about the changing. Use communication skills to effectively pass the message to people and make them accept.

In turns of the most suitable organisational structure for the changing approaches and actions it is better to havefluent communication process, flat structure with less hierarchy, and for innovative culture, which related to lessons of OPP. 

December 03, 2008

A book related to CBE assignment: " The Fifth Discipline

As I am doing CBE PMA, I found a book very useful, now I am reading it which is called the <The Fifth Discipline>, written by Peter Senge. Nowadays, quite a few enterprises are using theories from "The Fifth Discipline" to establish their learning organization.

<The Fifth Discipline> has set a firm foundation of studying on L.O., after which, a new wave of transformation towards L.O. has been set off. It developed wide range of interests from people and make them to study and practice on it.

The reason of publication of this book is because Senge saw that excellent western enterprises (most of western enterprise are more advanced) step into a new stage after experienced rapid development. The concept is about taking full consideration on problem of how to improve organizational competitiveness, especially recognizes that the recent management systems are nice and strict, but lack of flexibility. This is because the most important factor in the organization that potential of human capital has not been fully developed. Therefore organization trends of culture change and transformation towards L.O. come into being.

<The Fifth Discipline> treats human capital as main resource of productivity. It requires development and nurturing on human resources in order to mobilize the enthusiasm and initiative of employees, to help to align individuals and the organization. It is worthy to have a read.

December 02, 2008

One point review about Coaching

Picking up the idea about what we have this afternoon on Coaching, I found this point is interesting.

For coaching to be occur, we need to have a safe environment, as people are going to explore their weaknesses or failures to others, normally it makes people feel embarrassing.

Cover and ShXt

People are kind of animal that sometimes want to cover themselves to let everyone looks they are good, but in fact they are facing a lot of problems maybe life is in a mess(or probably what they think are in a mess). Just as the graph shows, a person in the middle but with shXt surround him (sorry about language but it is an exact example), as he can see around him is full of shXt, he need to cover himself by a shinny shell, so that everyone else looks he is a shinny person. The job for coaching is to break a hole through that shinny shell to improve what's inside, no wonder we need a safe environment as coaching, in this degree, is trying to break the self-protection layer.

On the other hand it makes me think about the real circumstances and help me to build confidence, as people always feel how good others are and how bad themselves are, but in fact everyone has a shinny cover which they can't see whilst what they can see is only the layer inside the cover which is shXt. As confidence is an important factor of leadership, I think this example would make you think and develop your confidence.

December 01, 2008

Learn how to be a good leader from President Bush

Writing about web page

Maybe President Bush's world of mouth is not good in most of your opinions; however, if one has bad sides he must also has good sides, some of his actions set a very good example for leadership which makes me associate how to be a good leader.

1.   Do it when it is supposed be done, do not panic during unexpected events.

When 9.11 event happen, Bush was having lesson with pupils and teacher in a primary school. After he has been told the message, he remained calm, continue reading text book with pupils until finished, then started to solve the problem.

As a leader or even normal people we need to have a thoughtful plan before doing things, strictly according to the plan, as a book of him talking about leadership said, "If it is in the afternoon, I must be running for exercise". Only we have enough planning, we won't be panic when something happens. Especially as a leader, if he panics and getting nervous, others will getting more unconscious and don't know what to do.

2.   Leadership with consistence of purpose

This is what EFQM model also asks to do. The war against terrorism and still remain troops when war has finished are controversial action in the world. I am not evaluating the action is good or bad here, but anyway, it is very difficult for doing a thing when pressures come out from every direction, but Bush keep his strategy in order to achieve goals of counter terrorism. That's the reason why his support rate was keep as high as 80-90% during the period, although it then went down to less than 40% which was the lowest rate in American history.

November 30, 2008

Pros and Cons for Promotion and Firing Policy (PFP)


1.   Simply set PFP such as FRS is a lazy way to administer pay for performance program. The percentage system creates a convenient way which requires minimum effort to identify great or poor performers. This way causes judgment bias, as one's performance depends on various factors; it is very good in LE website that gives teaching as an example. Our grades depends on mainly the effort, but also on teaching quality, personal interests, teaching facilities and quality of classmates etc. it is even more complex in commercial organization. Efforts take even less part that can decide your result. Chance, environment, training/experience and leader's direction are all crucial uncertainties. However P&F only look at performance through effort, regardless other factors.

2.   Much work is done by groups. It is no fair way to really compare people because it is difficult to isolate individual contribution. If have to rank people in a team, even if the team is truly high-performance, someone still be ranked low.

3.   Not good for teamwork as it associates against each other instead of fostering a collaborative work environment. People are likely to be more focus on their own progress than that of the team as a whole.

4.   Too much focus on PFP makes people care about goal but just trying to beat the judgment scheme, may be even cheat in the scheme somehow or ensuring the blame for failure goes to elsewhere.

5.   Significant replacement cost if someone gets fired. A new person coming in needs to be trained, taken care by managers which cost even more financial and human capital.

6.   Personal bias on PFP is also a problem. Some people are good at one task doesn't necessarily mean he/she is good at another. Managers giving reports is also based on their own views. Then employees tend to seek manager who writes good report instead of focusing on their work.

7.   Creating a culture of fear and mistrust, people afraid of making mistakes which contradicts against Deming's theory. In Deming's learning organization, it encourages people to take risks then lead to improvement. But if under PFP, taking risks might cause worse performance, they would rather sit back and do nothing.

PFP is said to be controversial is because e.g. who can guarantee that everything in organization is objective rather than subjective, is there any evaluation totally fair? How can we have motivation if there is no pressure? The questions lead to Pros.


1.   PFP helps align the direction of the individual and the company, also indicate the levels of performance.

2.   Good performance can be reward consequential improvement, in moral and motivation. If employees can see their performance directly link to financial rewards or promotion, or their failures link to being fired, they will work towards maximum potential for the goals.

3.   PFP makes everyone knows where they stand in the organization. Poor performancers and weaknesses will be surfaced which is easier for setting up training program.

4.   Create a culture based on achievement. PFP ensure the only right people are hired and those people can attract more people with talent.

From which we can see that PFP improves the organization's performance to fairly reward top performers, and to help improve contributions of low performers, or remove them as the ¡¡ãdead wood¡¡À which drags down higher performers.

How to improve from different aspects

  • Time frame: should PFP be used constantly or just during company's key period e.g. culture change. We need to choose wisely by considering the pros and cons it brings.

  • Organization level: does the policy imply on the whole organization, or only basic workers. To let the policy more effective, probably we can use 360 degree appraisal. Not only manager can give evaluation to employees but employees can also give feedback for managers or for each other.

  • Distribution curve: should we use ranking system as GE, top 20%, middle 70% and bottom 10%, or grades as A, B, C. More sharp the system is, more motivation can be brought, but also with more negative effect.

  • Confidentiality and outcomes: to what extend we can publicize the fact in order to protect low performers' self-esteem, and how to deal with outcomes. Do we give notices and chances for improvement, offering training program or fire them directly?

Different level of PFP suits different industry and culture, e.g. sales department is good for sharp PFP which makes people perform as good as they can while innovative culture needs less intensive PFP as people are require to take risks. To overcome the negative perception of PFP, we need to have honest communication, thoughtful management appraisals and supportive structure to recognize and rewards those strive to perform. Offering chances to improve rather than simply punish low performance.

Finally I personally even don't know is it good or bad for having PFP in a company. I always can't stop considering its negative effect when I think it is good or I feel it also add value to company when I think it is bad. By the way, this let me associate with undergraduate study, I don't know if the universities is using the same kind of scheme that bottom part of students are asked for retaking the academic year or being kicked out, first class students get reward for scholarship. If PFP in organization is a controversial system, then the regulation in university is also controversial, then is there anyway to change?

November 29, 2008

Case related to definition of leadership

Last time when I did the 20 definitions of leadership, reading those features of leadership on the excise sheet, it was the first time that leads me to have real consideration about what is leadership stand for. We can easily associate it with very common cases.

Now, consider a regular issue for Company X. As an influential leader, the CEO sets the agenda (this is about leader establishing purpose or direction): for example, five-fold revenue increases in five years. The employees voice their doubts and concerns. This CEO asks a series of questions aimed at increasing his understanding of the employees' concerns. Some of those concerns prove to be legitimate. For example, employees might be concerned as to whether or not there are plans for expanding the infrastructure along the way. Being able to use himself as a barometer of how others are feeling, the CEO senses that the opposition may also have to do with the employees not knowing why such an expansion is necessary.

Sitting back and reflecting on how he might feel if he were in his employees' shoes, the CEO goes back to them and engages in meaningful dialogue about why such an expansion is necessary. For example, perhaps he has reason to believe that without such an expansion, their organization is going to lose its independent status and will be sold. The CEO communicates those concerns and helps the employees consider what is desirable about remaining independent.

Thus, he communicates his value of service, letting his employees know that service to the organization, including his employees, is at the heart of his new vision. He also demonstrates humility by letting his employees know that he values their opinion, that there may be issues that he has not considered, that suggestions from others possibly could serve the entire organization. He therefore encourages open dialogue about how the goal can be achieved. Sensing his humility and authenticity, the employees model his behavior. They, too, communicate with their direct reports that they are interested in their employees's ideas and suggestions.

With employees who trust him, this CEO is much more likely to realize his vision.

In this case, leader thinks about the relationship between employees and leaders, he uses proper communication process to enable the followers to build their voluntary effort help the organization to achieve common goals.Becoming an influential leader is a life-long goal that requires conviction, patience, practice and dedication.

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